Incentives keep iMac moving

The largest U.S. retailer of PCs reported yesterday that special sales incentives such as free peripherals and low-cost loan programs have helped boost its sales of Apple Computer's iMac
computers at a time when demand
for the system has been tapering off.

CompUSA said that last weekend's iMacs
sales were the largest since the product's initial launch in August. This
makes the iMac the best selling computer for the computer
superstore chain. CompUSA is the largest such chain with more than 200
stores across the U.S.

The promotions helped boost iMac sales just as interest was beginning to
wane. The computer was the No. 1 selling desktop model in PC superstores in August and September according to Matt Sargent,
industry analyst at ZD Market
Intelligence, a research firm.

However, the results of iMac sales in the overall retail market are not
showing significant long-term strength, Aaron Goldberg, vice president of
the same firm wrote in a report earlier this month.

Goldberg said iMacs sold at the rate of about 20,000 per week after its
mid-August introduction, but in September, the number dropped to less than
10,000 per week. Other research confirmed the trend: PC Data said the iMac slipped from No. 2
to No. 3 in sales from August to September on the list of best
selling PCs.

To counter the iMac drop-off, this past weekend CompUSA offered rebates on
Epson printers and Umax scanners bundled with the iMac that amounted to
offering the peripherals for free. Apple's recently introduced loan
program, which enables customers to buy an iMac for just $29.99 per month,
was also cited as a draw by CompUSA.

Analysts speculate that the promotion was an attempt to draw sales away
from Best Buy, which just launched
sales of the iMac after re-signing as an Apple reseller.

Apple also has offered up some modest modifications to the iMac to maintain
interest in the translucent computer.

Some customers--such as those interested in games--may have been waiting in
the wings because of the iMac's modest 3D graphics capabilities, but Apple
said it is now including a more powerful graphics chip and three times as
much graphics memory for improved performance.

New systems are shipping with the recently released version 8.5 of the Mac
OS now, as well as Adobe PageMill 3.0, which allows users to create and
manage their own Web pages.

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